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Technology Stocks : Semi Equipment Analysis -- Ignore unavailable to you. Want to Upgrade?

To: michael97123 who wrote (6006)	10/9/2002 3:12:31 PM
From: michael97123	Respond to of 95530

From george cole on ihub--not pleasant reading at all Posted by: George Cole In reply to: None Date:10/9/2002 3:11:19 PM Post #of 33771 Latest from Alan Newman. MUST READING. Clueless Lehman Bros. recently downgraded the airline sector to neutral. I guess we're happy for the advice not to buy anymore. After all, over the last three months American, Delta, UAL & Continental had swan dived by a collective average of 69.2%. But to be fair, perhaps we should have only quoted performance over the last month, a mere 40.6% hit. Talk about your Johnny come latelies, we can only wonder what Lehman brings to the party besides spiked punch. But if that is true for Lehman, shouldn't the same be true of others? So we checked some recent price targets just to see. In May, JPMorgan placed a $32 tag on AMR, a mere 588% gain from here. The same month, they pegged Delta for $44, only a 347% leap of faith, pegged Continental at $24, which would be a four bagger, and pegged UAL for $24, which would be an amazing ten+ bagger. Whew! Were there other spikers as well? You can bet on it. Speaking of folks with unrealistic expectations, how can we leave out Wall St. strategists, who are collectively as clueless as they come? Other than the lone vivid picture of sanity illustrated by Merrill Lynch's Richard Bernstein, who last week lowered his year end SPX target to 860, strategists have painted only rosy scenarios out as far as the eye can see. As prices again sank into new lows last week, allocations to stocks rose to more than 70%, about as high as we have seen them in the last three years. There is apparently no circumstance that will turn strategists bearish. While the economy rolled on and while it sank into recession, they were bullish. While earnings rose rapidly and while they cratered, they were bullish. While prices rose and while prices collapsed, they were bullish. The obvious question is, "if they are always bullish, then why do we need strategists in the first place?" Amazingly, despite new lows last week, Investment advisers/newsletter writers are still no more bearish than they are bullish. Those who are comparing the current market to 1974 and extrapolating a similar autumn bottom do so without the benefit of a similar bottom in sentiment. In the prior bear market, bears outnumbered bulls for 42 of the first 44 weeks of the year and for much of that time, there were twice as many bears than bulls. But in the most recent four (!!!) years, there have been only seven weeks in which bears outnumbered bulls and only by narrow margins. Worst of all, mutual fund cash levels at 4.9% are proof that Wall St. cannot manufacture anything more than a bear market rally. Both relative and absolute cash levels have declined sharply from October 2001, even as all the major indexes have gone on to new lows. Long term optimism and complacency on the scales we see now has never taken place before in stock market history during a bear market. No matter how one-sided short term sentiment now appears, the short term is a fickle beast and can be unwound in a flash, so is likely to fuel nothing more than a modest rally. However, any rally will probably juice longer term sentiments even more. A paradox? To be sure, but that is what a mania is all about. And make no mistake, the mania is still alive. Alan M. Newman, Editor HD Brous & Co., Inc.'s Crosscurrents